The role of patents and trade mark rights for intellectual property changed fundamentally in the 1990s.

The change expresses itself in a phenomenon known as ‘patent-paradox’ in the related economic literature. The number of patent applications increases notably faster than companies’ R&D expenditures, even though companies attribute a decreased role to patents in protecting innovations. Patents have gained a strategic importance that exceeds their traditional role of appropriating direct profits from R&D. This strategic importance is often no longer held by individual patent rights, but rather by many interlinked patents, which are called patent thickets.

The aim of this project is the theoretical structuring and empirical analysis of the reasons for the observed changes in patent applications. The models traditionally used to explain innovation and patenting decisions will be extended and new models will be developed. Up until now, it was usual to describe the protective role of an individual patent for a specific product and therefore to equate patents with products. This approach neglects that many patents are never used for products or processes, but are employed as a device to block competitors. Furthermore, the classic models ignore the fact that the strategic role of patents has increased recently, particular in conjunction with functionally interlinked patent rights. Only with extended or new models is it possible to study empirically observed phenomena such as cross-licensing, patent-pools or patent families. The consequences of the strategic use of these phenomena will be evaluated in the theoretical analysis.

Hypotheses deduced from the models will be verified with data. Data sources, such as the Mannheim Innovation Panel and the data bases of the European Patent Office and the German Patent- and Trademark Office will be linked for this purpose. Furthermore, individual patent rights will be pooled into new units of analysis (e.g. strategic patent families).

The project is part of the first special research area/Transregio in economics: Governance and the Efficiency of Economic Systems.